Fixing California: Regulation gone wild

The green movement in California has led to mass environmental over-regulation

On March 12, 2009, officials from the California Air Resources Board met with representatives of U.S. automakers and auto-supply firms to discuss vehicle-paint standards that state regulators were moving to implement. Soon afterward, the auto-industry insiders’ WardsAuto website detailed how the meeting had left some attendees stunned — and major paint suppliers “tearing their hair out.”

The air board wanted to require heat-reflecting paint on vehicles as part of its effort to improve fuel efficiency. But its proposed “cool paints” initiative would have amounted to a de facto ban on black cars and trucks. And there was a fatal shortcoming with the board’s plan: Such vehicle paint didn’t yet exist.

WardsAuto’s reporting led to national headlines — and mockery — directed at the air board. But did it deter the board from its over-the-top agenda? Hardly.

Ten months later, board officials released draft rules that could have made underinflated tires a criminal offense with a punishment of $1,000 per violation and six months imprisonment. Why? To improve mileage.

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Once again, this bureaucratic overreach produced sharp public criticism, including from some aides to Gov. Arnold Schwarzenegger, which led to the rules being shelved.

But what isn’t commonly understood about these giggle-inducing stories is that they weren’t aberrations produced by an isolated handful of zealots. Instead, they reflect a state environmental bureaucracy that sees breaking new ground as its fundamental goal — no matter how new rules and regulations will play out in real life.

It didn’t use to be this way for California’s environmental regulators. Indeed, for much of the past 70 years, the Golden State repeatedly set thoughtful precedents that ended up being copied by other states, the U.S. government and industrialized nations around the world.

This is a view of the Los Angeles skyline on one of its frequent smoggy days, Dec. 11, 1958.
— AP

This is a view of the Los Angeles skyline on one of its frequent smoggy days, Dec. 11, 1958.
/ AP

In 1947, the Los Angeles County Board of Supervisors launched the Los Angeles County Air Pollution Control District, the nation’s first such government agency. In 1959, legislation established the California Motor Vehicle Pollution Control Board, putting a central focus on emissions and the need for more efficient emission-control devices. In 1967, the California Air Resources Board was established. In 1976, during Jerry Brown’s first stint as governor, the South Coast Air Quality Management District was founded, allowing for a coordinated regional effort to fight smog and other pollution from the beaches of Santa Monica to the Nevada border.

The gains these agencies have achieved have been impressive. While air pollution remains a serious issue in the Los Angeles Basin, it is vastly improved over what was the norm for much of the 20th century. Similar progress has been made in other parts of California.

Cleaning up the air wasn’t regulators’ only focus. Beginning in the 1960s, the degradation of San Francisco Bay with pollution and landfill was largely stopped and then reversed. The effort was led by the San Francisco Bay Conservation and Development Commission, which was the first coastal zone management agency upon its creation in 1965 and is the model for most such agencies around the world.

But along the way, the pragmatic focus of earlier regulators gave way to a view that held California must keep innovating in environmental regulation — whatever the cost or the unintended consequences. The CEOs who have long ranked California as the least-business-friendly state do so more over excessive regulations than high taxes.

This regulatory zealotry takes many shapes, afflicting both unlucky individuals and California in general.

The staff of the Coastal Commission, created by state voters in 1972, doesn’t just throw its weight around by blocking development well inland. It often reflects the contempt for constitutional property rights displayed by Peter Douglas, the self-described “radical pagan heretic” who was the agency’s executive director from 1985 to 2010.

A case involving San Luis Obispo engineer Dennis Schneider was sadly typical. Until a 2006 court ruling, the commission blocked Schneider from building a home on an oceanside cliff in a remote area near Cayucos. The official rationale? The home would violate the rights of surfers, kayakers and boaters by lessening the aesthetic quality of their view of the coast.

But it is the recklessness of the California Air Resources Board that has been most consequential. Instead of using cost-benefit analyses to gauge the impact and appropriateness of regulations, the air board now is hostile to the idea that regulations even have an economic downside. This is especially so since Mary Nichols began her second stint as executive director in 2007.

This is reflected in far more than just the stories about Nichols’ air board considering banning black cars or making the underinflation of tires a jailable offense. The history of AB 32, the state’s landmark anti-global warming law, couldn’t be more instructive.

The first-in-the-nation 2006 legislation — which forces a gradual shift to cleaner-but-costlier types of energy — contains a provision allowing a governor to suspend the law in case it is hurting the California economy. This was included because Gov. Arnold Schwarzenegger, lawmakers of both parties, economists and business interests were worried that if AB 32 didn’t inspire the rest of the world to follow California’s lead, the state would be left with uniquely high energy costs that would make it difficult to compete economically with rival states and nations.

But when the rest of the world didn’t follow the Golden State, extremist defenders of the law rewrote history by depicting it as a job-creation measure designed to be an engine of economic growth. The air board assisted the campaign with an upbeat 2008 economic forecast of AB 32’s likely effects that was scorned as unrealistic and misleading by Harvard’s Robert Stavins, the world’s leading environmental economist. To this day, air board officials routinely challenge the idea that there is an economic risk in forcing the state to pay much more for energy.

Nichols’ radicalism has been evident on other fronts as well. In late 2008 and early 2009, the U-T editorial page documented that costly, far-reaching air board rules to sharply reduce diesel emissions were tainted by academic fraud. They had been overseen by Hien Tran, a staffer who lied about his academic background and then later offered as evidence of his qualifications a Ph.D. from a diploma mill associated with a fugitive pedophile.

But Nichols refused to fire Tran — only suspending him without pay for two months. She knew of Tran’s deception when her agency’s governing board voted to approve Tran’s diesel rules but chose not to tell most board members about it until 11 months after they voted to approve the rules.

Soon afterward, the concerns about a lying researcher playing a key role in crafting onerous regulations turned out to be amply justified. In April 2010, several California news organizations reported that emission rules the air board adopted in 2007 for off-road diesel vehicles were based on computer models that grossly exaggerated the emissions. Tran was a primary author of a 2006 study that encouraged the board’s 2007 regulatory decisions.

He still wasn’t fired. He remains on the air board staff, making $91,500 annually as an air pollution specialist.

Why? Because on Mary Nichols’ air board, researchers like Hien Tran play a valuable role. They come up with studies that allow her agency to realize its primary goal of constantly producing pioneering environmental regulation.

If the studies don’t hold up and the California economy suffers as a result, so what?